Monthly Outlook - January 2023
SUMMARY OF THE MONTH
December marked the end of a difficult year in the markets, where few asset classes offered shelter and only tactical and timely positioning helped navigate the downtrend.
Key fears remained as investors grappled with sticky inflation and central bank uncertainty amid chilling weather and a rapidly cooling economy.
As China marks the end of the zero Covid policy and the ripple effects it sees on its population, the United States is moving ever closer to Taiwan following TSMC's announced $40 billion investment in semiconductor plants in the United States.
MACRO CORNER
December marked the end of a difficult year, one in which decades of events took place in months. As attributed to Lenin, "there are decades where nothing happens, and there are weeks where decades happen". That has been the sentiment over the past 12 months, where those who were unprepared or overconfident that things could continue as they had for the past few years were burned.
Key 2022 fears (inflation, rising interest rates, war with Ukraine) dominated investor sentiment throughout December. Weak economic data, despite a stronger than expected inflation report earlier in the month, have made investors cautious. We have long argued that there is likely to be more pain to come, even if intermediate bottoms form in the markets.
